Sentiments also got a boost after finance minister Arun Jaitley proposed to bring down the fiscal deficit to 3.2 percent of GDP from 3.5 percent.

The Sensex, which kept moving in a tight range after the Budget was presented in Parliament, made a strong rally by soaring 401.43 points, or 1.15 per cent to 28,057.41, powered by budgetary proposals to infuse Rs 10,000 crore in public sector banks, no change for capital markets and allocating a record Rs 3.96 lakh crore to infrastructure sector as well as granting infra status to affordable housing.

The broad-based National Stock Exchange' Nifty also saw an upswing and shot up by 109.00 points, or 1.27 percent to 8,670.30 following widespread gains in stock prices.

"No change in the capital gain tax, particularly long-term, in the Budget, cheered the investing fraternity" said a Delhi-based NSE broker, Manoj Choraria. The government also kept the security transaction tax (STT) and other taxes for the capital markets unchanged.

Shares of state-run banks such as SBI, Union Bank of India, Bank of Baroda, Punjab National Bank and Syndicate bank hogged the limelight and climbed by up to 4 percent as the government announced infusion of Rs 10,000 crore in public sector banks in the next fiscal.